Analysis: Changes and Transformations Faced by the Chinese Coatings Industry

From the beginning of the year, the external business environment faced by the paint industry is more severe than previously expected. Affected by inflationary pressures and macro-control measures in the domestic economy, market demand has slowed down. At the same time, market competition has become more fierce and raw materials and operating costs have continued to rise. These have brought the industry’s heaviest operating pressures in recent years to the present stage. From the perspective of some pessimists, the good prospects of the Chinese paint industry have begun to cast a shadow, but is the status quo really so? Recently, the author communicated with the marketing director of a large paint company, which gave a different opinion.

The market changes, the coating industry is still promising. The regional distribution of China's paint industry during the “10th Five-Year Plan” period has initially formed three major paint production bases with the Pearl River Delta, Yangtze River Delta, and surrounding areas in Beijing as the main components. After the "Eleventh Five-Year" period of development, paint production base from the Pearl River Delta, the Yangtze River Delta, the Bohai Rim to the central, western and northeastern regions to transfer to the more balanced regional development.

At present, under the background of transforming the mode of economic development, the paint companies with the Guangdong Province as the core in the Pearl River Delta have further extended to the coastal areas of Fujian. The Yangtze River Delta has further extended to the periphery with Jiangsu, Zhejiang and Shanghai as the core, and Beijing and the surrounding areas have also moved towards the Bohai Sea. The Bay Area is extended and the central area is gradually forming the fourth largest paint production base.

Over the weekend, the author and a large paint company do not want to be named marketing director in a chat, which said that although some companies in the paint industry have a certain degree of visibility, but also has not small achievements, but it should be said that the ascendant, the potential is great, the market is very large .

“I recently visited two cities in Henan, especially the prefecture-level cities around Henan. The towns and townships of the entire second and third-tier cities on their side have actually flourished in both commodity and self-built housing markets, but they can really sink into these townships. The paint companies are still very few. Therefore, some people directly use putty and do not brush paint, do not think that some functional paints can bring any benefits. Therefore, this marketing director, "how to further sink the channels I think also There are many issues worth exploring."

36 million houses is an opportunity in the next 5 years, China will start construction of 36 million sets of security and housing projects, this year the country will start construction of 10 million sets of security and housing projects. It is understood that investment in affordable housing projects in 2011 will reach 1.4 trillion yuan***. According to the 5% calculation of coating, it can drive the sales of 70 billion yuan. Even if it is reduced to 1%-2%, the demand for coatings will exceed 10 billion yuan. This will be a huge demand for coatings.

According to the director of marketing, 36 million houses will be a very large market if they are calculated according to 5% of paints. In view of the impact of the affordable housing market on the development of the paint industry, the author has been conducting investigations since the beginning of 2011 when he visited the market. However, according to the situation of communication between companies and me, many companies do not understand and feel that this matter is too far away. ,Pointless. This is where I am extremely confused.

In fact, now the third or fourth tier cities or developers, related units of the Ministry of Construction, and design institutes are not enough to understand the paint industry. In fact, we can understand that from 2010 the vigorous paint to the countryside movement was quiet today. The sound that the paint industry can make is really too small and too weak. It would make sense if we can keep up with the development of the entire Chinese economy.

Six major challenges in the transformation of enterprises, the road to paint a strong country has long been a long way to go, from the central government to local governments at all levels have set up a wide range of **, special funds, targeted for the development of small and medium-sized science and technology enterprises to provide support and support. The supporting funds set up by various ministries and commissions of the country include the 863 Program of the Ministry of Science and Technology, the Torch Program, and the SMEs' technological innovations. Each year, there are billions of dollars in funds for the R&D, technological innovation, and achievement transformation of technology-based SMEs; Ministry of Foreign Investment Development, SMEs International Market Exploitation Fund Project Plan; Ministry of Finance's Utilization of High-tech Renovation Project Subsidy*, National Key New Product Subsidy; National Development and Reform Commission's Industrial Technology Progress Funding Subsidy Program, Energy Saving Products Discount interest project plan; development of electronic information industry of Ministry of Information Industry**. In addition, the government has also set up a special development for small and medium-sized enterprises for entrepreneurship counseling and services for SMEs, supporting technological innovation, encouraging professional development, and opening up the international market. In addition, in order to promote the development of local science, technology, foreign trade, and economy, local governments at all levels also allocate funds from local governments to set up special fund plans to support the development of small and medium-sized technology enterprises. So how can the paint companies challenge and get support from government funds?

The market is very big, but now the paint companies are not prepared enough. I think there are four main challenges:

The first is the transformation of enterprise technology, from production technology to application technology. Safeguards and housing construction The widespread use of paint products or docking with furniture factories points to the prospects for the development of paint and coating integration in the coatings industry. It imposes higher requirements on coatings companies, not only to produce good products, but also to paint. Enterprises need to match more appropriate paint coating system technologies according to the characteristics of different project projects and the environment.

The second is product transformation, considering the functionalization of the coating industry. The era of a barrel of paint applied to all consumers has passed, but this is not the current concept of chaos for most paint companies in pursuit of marketing tools, but a new technological change in the real sense.

The third is channel transformation. Currently, there are 10 kinds of marketing channels in the paint market, but there are some loopholes and there are certain risks. How to carry out channel innovation has become the most important issue to be solved.

Fourth, talent transformation, whether the current marketing talents adapt to the white-hot competition environment that integrates more fast-dealing marketing methods.

Breakthroughs in the four major innovations When the author communicates with senior people in the industry, he believes that the four innovations can break through the crisis and make a breakthrough, rejuvenating the paint industry.

First of all, technological innovation is the core competitiveness of a company's steady development, or the connotation of a brand. Without technology, this product may have insufficient content and lack of stamina. However, technology alone will not work.

Second, market innovation is the extrinsic driving force for the rapid expansion of enterprises, because the market is a guide and a catalyst.

Of course, management innovation is also a driving force for the healthy growth of a company. Any fast-growing company, well-developed company, or healthy company, its intrinsic management innovation, or its unique tricks and tricks, is reflected in management.

If the last company wants to make a century-old store, it will last forever, and it needs to be created in terms of development, that is to say, it cannot blindly imitate or follow the footsteps of others and take the old path.

In addition, I believe that the development of the industry should gather four consensuses:

First, the industry must make progress in science and technology and establish benchmarks. At present, China can only say that it is a large paint country rather than a strong paint country, indicating that our paint companies are still weak. Therefore, the government and the association have the responsibility to establish benchmarks within the target time.

Second, the industry establishes more standards and is more professional, so that brand enterprises and large-scale responsible companies can be more ahead.

Thirdly, leading companies set an example. We only manage the business and operate the industry. In fact, only the entire industry is good for our business. Therefore, under the leadership of many industry leaders, taking the business industry seriously, then the company will go better. .

Fourth, the industry holds the market. Now everyone says winter, I believe our paint industry can hold this cold winter.